Holding Jurisdictions for Investments in China In conjunction with the STEP Benelux By Kristina Koehler-Coluccia, Director of Klako Group October 2013

Questions to ask yourself when planning your China Investment Who, What, Where, Why & When 1.Who am I going to employ to manage my China business? Start with a distributor or agent? Will I have a department responsible in my home jurisdiction? Will I second an expatriate to China? If yes, where is he from? Will I localize my business and only hire local employees? Will I have a mix of cultures to foster both the philosophy of the company and the culture of the local market? 2.What am I actually going to be doing in China – what is my business strategy? Sourcing, Sales, Service Do I have important IP which needs to be protected? 3.Where is my business in China going to be in the short and long-term? Where is my short-term strategy focused on? Where do I want my business to be in 5-10 years time? 4.Why am I really going to China? Have you done a market research study? Have you made a business plan putting in black and white your goals and strategies for market penetration? 5.When am I planning my entry? Laws and regulations change daily – your business plan needs to be updated regularly!

Singapore versus Hong Kong versus China Comparison Chart

Singapore versus Hong Kong versus China Comparison Chart

Singapore versus Hong Kong versus China Comparison Chart

Singapore versus Hong Kong versus China Comparison Chart

RMB Offshore Center VERSUS

Other Common Holding Jurisdictions LuxembourgUnited Kingdom Ireland Netherlands Switzerland Offshore Locations BVI Seychelles Cayman Isl. Mauritius Anguilla Etc

Trends for Inbound Investment to China 1. Tax Planning Always forgotten and focus is only ever placed on Short-Term Results Talk to advisors in each link of the chain to understand what is most beneficial for your business model 2. Market Research Never a concern Make sure you know why you are entering the market before actually entering 3. Singapore is used to enter the following South-East Asian countries: India, Malaysia, Thailand, Vietnam, Bangladesh and Indonesia 4. Hong Kong is used to enter the East Asian countries: China, Mongolia, Japan, Korea, Philippines, Australia 5. China is used for establishing operational entities

Trends for Outbound Investment from China 1. Tax Planning No need – Never had to do it in China so why now? 2. Market Research Surprisingly thorough 3. Singapore is used for Family Trusts and Private Banking – particularly as a vehicle for Purchasing Assets 4. Hong Kong is used to go IPO 5. China needs MAJOR restructuring in order to become transparent

Klako Group - Our Services Klako Group is an international accounting and management consulting firm established in Klako Group provides a wide range of market entry consulting, incorporation, tax, audit, accounting, trade and human resource services to organizations interested in entering and expanding throughout China, Hong Kong, Singapore. Klako Group is managed by an international and local team of over 120 consultants, accountants and legal professionals who work in our ten offices in China, Hong Kong and Singapore. From our offices in Beijing, Chengdu, Dalian, Guangzhou, Hangzhou, Hong Kong, Shanghai, Shenzhen, Singapore and Tianjin, we offer the following services: Market Entry Consulting Incorporation Corporate Compliance Accounting & Administration Tax Advisory Audit & Assurance Trade & Supply Chain Recruitment Our typical clients are small-to-medium sized privately owned companies as well multinational corporations. We recognize that each customer has individual requirements and our objective is to provide an efficient and cost effective service tailored to their specific needs. Our goal is to develop a lasting partnership with our customers with a focus on protecting their investments and maximizing their returns from their activities throughout China and Hong Kong. Our International Desks speak English, German, Spanish, French, Italian, Portuguese, Russian and Japanese.

Klako Group – Our Team Our founder, Mr. Klaus Koehler, has lived in Hong Kong since After many years of international trading activities with Hong Kong and China, he established Klako Group Holdings and its associated entities in Since then, Mr. Koehler has built up an experienced international team of accountants, legal and professional consultants (European, American, Chinese). The members of our team are multilingual and combine many years of expertise in accounting, tax, manufacturing, international trade, consulting, recruitment, etc. Our cultural and professional diversity gives us the flexibility and knowledge required to understand our clients' needs and offer integrated service packages. Sharing our understanding and knowledge of both the West and China is one of our major principles for success. Main Contacts: Group Headquarters - Hong KongChina Headquarters - Shanghai Mr. Sven Koehler Ms. Kristina Koehler-Coluccia Group Managing Director & Director - Hong Kong & SingaporeDirector - China 10A Seapower Ind. Centre15/F Cross Tower 177 Hoi Bun Road, Kwun Tong318 Fuzhou Road, Kowloon, Hong KongShanghai, , China Tel: Tel: Fax: Fax:

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